1. An enzyme catalysing the methylation of caffeic acid to ferulic acid, using S-adenosyl-L-methionine as methyl donor, has been extracted from leaves of spinach beet and purified 75-fold to obtain a stable preparation. 2. The enzyme showed optimum activity at pH 6.5, and did not require the addition of Mg2+ for maximum activity. 3. It was most active with caffeic acid, but showed some activity with catechol, protocatechuic acid and 3,4-dihydroxybenzaldehyde. The Km for caffeic acid was 68 muM. 4. 4. The Km for S-adenosyl-L-methionine was 12.5 muM. S-Adenosyl-L-homocystein (Ki = 4.4 muM) was a competitive inhibitor of S-adenosyl-L-methionine. 5. The synthesis of S-adenosyl-L-homocysteine from adenosine and L-homocysteine and its consequent effect on caffeic acid methylation were demonstrated with a partially-purified preparation from spinach-beet leaves, which possessed both S-adenosyl-L-homocysteine hydrolase (EC 3.3.1.1) and adenosine nucleosidase (EC 3.2.2.7) activities. This preparation was also able to catalyse the rapid breakdown of S-adenosyl-L-homocysteine to adenosine and adenine; the possible significance of this reaction in relieving the inhibition of caffeic acid methylation by S-adenosyl-L-homocystein is discussed.